The main difference between Cash Book and Passbook is that Cashbook saves the records of cash dealings, whereas the Passbook is providing by the banks to their account holders to record the payment and withdraw of money.
Cash Book vs. Passbook
A cash book is a financial periodical that holds all cash receipts and payments, including bank securities and extractions, whereas the passbook is allotting by the bank to create the payments and removals records. Cashbook are maintaining by the companies, whereas passbook is imprinting by banks. Cash books are maintaining by cashiers while passbooks are keeping by bankers. In cash book, cash are placing on the debit side of cash book, whereas in passbook cash are putting on the credit side of the passbook.
In cash book, cash are withdrawing from the credit side of cash book, while in passbook cash are extracting from the debit side of the passbook. Cashbook is not signed by the cashier, whereas the banker approves the passbook after every business deal. Cashbook is matching after a specific period, while the passbook is balancing after every transaction.
Debit balance of cash book indicates cash at bank and credit balance expresses bank is an overdraft, whereas the debit balance of passbook confirms bank is overdraft and credit balance shows money at the bank. The grounding of a cash book is optional, while the preparation of a passbook is necessary. In cash book, checks are putting in accounts on the same date of depositing into banks, while in passbook checks are placing in accounts only on the time of awareness of the check. In cash book assortments and payments are entering cash book after seeing passbook, whereas in passbook expenses are recording in it first.
What is the Cash Book?
The cash book means a book that is saving all the records of cash communications. Cashbook is recording all cash trading of the business in a commercial paper. The document is cooperative in the groundwork of the account book. It is a supplementary book. The cash columns and bank columns are performing like the same as cash account and bank account.
Initially, cash is recording in the cash book and then dispatched to the related record accounts. Additionally, a cash book is a temporary cash account in the book. A corporation that is properly keeping a cash book does not need a requirement to open a cash account in its account book. Cashbook is maintaining on a regular base which helps in avoiding fraud. All dealings in the cash book have two sides, debit that is on the left side and credit that is on the right side. All cash earnings are recording on the debt, and all cash expenses are recording by date on credit.
Checks are depositing for collection is recording on the actual date of deposit, and when checks are issuing a creditor, it is recording on the exact date of the issue. The debit side of the cash book is showing cash is in the bank, and the credit side is showing a bank is an overdraft. The cash book is maintaining by cashiers, but the formation of a cash book is optional. The types of cash book are simple cash book, double column cash book, and triple column cash book.
What is Passbook?
A passbook means a book that is issuing by the bank to their account holder to create records of the number of payments and removals. Through the help of a passbook, banks update their client about the position of their accounts. Passbook records the bank dealings in a savings account. It is the particular duplicate of the customer’s account in the bank’s book. It marks the payments, removals, bank duties, etc. throughout a fiscal year.
Initially, the bank generates the records of the customer’s account in its book. After that, they copy in a passbook and then give it to the customer. All the transactions of the customer with the bank are recording in the passbook by the bank. Passbook is writing by the bank, but it remains in the investor’s ownership, and a customer can have an eye on the entries that he makes in his account by the bank. Passbook also has a debit or credit side to record all the trades. Depositing of cash is presenting on the credit side, and withdrawal of reserves are presenting on the debit side.
Checks are inserting to get money on the date in which the amount really gets from the account of the borrower, and the checks are allotting to the creditors when the expanse is reimbursing by the bank to the creditor. The debit side of the passbook is showing an overdraft while the credit side of the passbook is showing cash at the bank. It is compulsory to create and maintain a passbook.
- The cash book keeps the record of cash trading, whereas the passbook is issuing to have a history of deposits and withdrawals.
- Cashbook is organizing by the firm; on the other hand, a passbook is captioning by banks.
- The cash book is optional. Conversely, the passbook is compulsory.
- In cash book, incomes are showing on the debit side, on the flip side, in passbook income is showing on the credit side.
- Cashbook enters the payments on the credit side, whereas the passbook enters the amount on the debit side.
- Cashbook is showing the cash in the bank in debit side balance; on the other hand, in passbook, debit balance is showing overdraft.
- In cash books, credit balance is expressing overdraft. On the flip side, in passbook credit balance shows cash at bank.
- Cashbook is maintaining by the cashier. Conversely, a passbook is supporting by the banker.
The bank settlement report is arranging by the help of cash book and passbook to review the transactions that both books are the same or not. The statement also summaries the source of no agreement of cash book and passbook.